[Ip-health] ​Duke letter to White House on the problems with the TPP IP Chapter

Elizabeth Rajasingh elizabeth.rajasingh at keionline.org
Wed Jun 10 11:20:12 PDT 2015


Duke letter to White House on the problems with the TPP IP Chapter
10 June 2015

Attached below is a May 20, 2015 letter from Duke researchers to the White
House Office of Science and Technology Policy, setting our problems in the
TPP IP Chapter. The letter is signed by Jason Cross, the Director of the
Innovation & Technology Policy Lab (ITPLab) at the Sanford School of Public
Policy & Duke Law School, at Duke University.

The whole letter is worth reading
(available in PDF format

Here are a few sections from the letter:​


As of the May 16, 2014 draft of the TPP, these important TRIPS provisions
are dangerously limited and the risk this poses to public health should not
be underestimated. The Article 30 exceptions are subject to Investor-state
Dispute Settlement, and language protecting the Article 31 exceptions has
been removed. The TPP draft resulting from the Ho Chi Minh Round vastly
limits the of use compulsory licenses and makes it so that any use of
remaining exceptions carries the risk of international arbitration. Among
other things, these barriers greatly limit policy space available under
TRIPS to prevent or correct the excessive costs of medicines. Furthermore,
the recent drafts of the TPP contain broad requirements for the payment of
damages for patent infringement. As of May 16, 2014 it reads:

"[The TPP member’s] judicial authorities shall have the authority to
consider, inter alia, any legitimate measure of value the right holder
submits, which may include lost profits, the value of the infringed goods
or service measured by the market price, or the suggested retail price."

Not only is this text inconsistent with the United States’ own position on
the payment of remedies for patent infringement, but it also poses a threat
to global health. Among other examples, the Affordable Care Act contains
limitations on damages for biologic drug patents that would fail to meet
the TPP standards. The ACA states that payment of a "reasonable royalty"
should be the "sole and exclusive remedy" in cases of infringement. The
current liability rules in U.S. law, seen in 35 U.S.C. §271(e)(6)(B), are
designed to encourage full and transparent disclosure of biologic drugs
during patent application and ensure production knowledge is available to
potential competitors. The ability of biosimilar manufacturers to produce
competitor products is important when considering product pricing and
access to medicines. However, limiting liability rules to the standard
contained in the TPP also threatens important safeguards and strategies for
access across patents, trademarks, copyrights, and other forms of IP rights.

The contradiction between US law and the norms contained in the TPP opens
up risk of investor state litigation. Ultimately, passage of the TPP would
decrease state sovereign immunity. For example, after the precedent set by
the U.S. Supreme Court in Florida Prepaid Postsecondary Education Expense
Board v. College Savings Bank et al.(98531) 527 U.S. 627 (1999), Argued
April 20, 1999–Decided June 23, 1999, state governments can decide their
own remedies for IPR infringement. This power is currently coming under the
spotlight as the Department of Veteran’s Affairs is asking for the use of
28 U.S.C. §1498 in order to be able to treat Hepatitis C Virus. The retail
price suggested by Gilead is $95,000 per patient and the Veteran’s Affairs
budget is unable to provide treatment at this price. 28 U.S.C. §1498 is
supposed to allow governments use of a patented product with the payment of
a reasonable royalty, but under the norms of the TPP, Gilead could ask for
compensation equal to $95,000 per patient and deter the government from
taking action to treat its veterans.

Elizabeth Rajasingh
Perls Research and Policy Fellow, Knowledge Ecology International
1621 Connecticut Ave. NW, Suite 500
Washington, DC 20009
elizabeth.rajasingh at keionline.org | 1-202-332-2670

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